On November 9th the BCTGM organized a company-wide workers strike, taking 24 Hostess production facilities offline until management proposed a new arrangement. One week later, talks having made little progress, Hostess filed for bankruptcy protection, and is planning to close 36 bakeries, 242 depots, 216 retail stores, and 311 hybrid depot-store facilities. The move would leave nearly all of it 18,500 employees unemployed, while 19 senior managers would recieve a total of $1.75 million in compensation after the dissolution of the company. The judge presiding over the case, Robert Drain, denied Hostess' bankruptcy motion, instead urging mediation with BCTGM in the interest of, "giving the union as well as the debtors and their lenders a last chance to try and work those issues out in private". As of yesterday, no agreement has been reached, and Hostess plans to continue with its move to liquidation.
The Cream Filling
But the greater issue at hand, is why Hostess is liquidating instead of making a deal? And what sort of response is closing up shop when employees ask to maintain their lowered wages, health and pension benefits? The company's decision makes even less sense considering the costs of closing amount to $70.4 million between closing its various corporate offices, retail stores, and production facilities. Instead of coming to an agreement with people who have already shown a willingness to compromise, Hostess would rather spend millions to eliminate tens of thousands of jobs and sell itself to the highest bidder.
This whole thing makes you want to ask, "is that how you really feel?", because a company willing to go bankrupt rather than improve its business and pay its workers speaks volumes. Sure, Hostess has a host of financial difficulties with mounting debts and brands that are the enemies of a culture cutting out carb-laden snack foods, but it's also been poorly managed. Prior to its first bankruptcy filing in 2004 Hostess, then a blending of Interstate Bakeries and Continental Baking, acquired four different bread companies and attempted to merge the operating paradigms under one umbrella. They failed dismally, because the success of snack cakes couldn't be translated into bread making, and the revival of dieting plans like the Atkins Diet only complicated the company's existing concerns.